Credit card debt set to hit a fresh record

foxbusiness.com:

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Americans are racking up more credit card debt as still-high inflation and steep interest rates continue to make the cost of everyday necessities more expensive. 

The New York Federal Reserve Bank's Quarterly Report on Household Debt and Credit, slated for release on Tuesday morning, is expected to show that credit card debt marched incrementally higher during the three-month period from July through September, smashing a previous high of $1 trillion, according to Matt Schulz, the chief credit analyst LendingTree.

That would mark a major reversal from just three years ago when households were rapidly paying off credit card debt with the stimulus payments they received during the COVID-19 pandemic.

«We’ve seen pretty sizable jumps in credit card debt in most of the last year and a half,» Schulz told FOX Business. «I don’t know that we’ll see quite that big of a jump this time around. But I would also be surprised if we saw a decline.»

A FED PAUSE LIKELY WON’T HELP STRUGGLING CONSUMERS

A sticker for Mastercard, Visa and Discover credit cards displayed on a door in New York, on Oct. 17, 2023.  (Angus Mordant/Bloomberg via Getty Images / Getty Images)

The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.72% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991. 

If people are carrying debt to compensate for steeper prices, they could end up paying more for items in the long run. For instance, if you owe $5,000 in